Three major contradictions in the Bank Asya operation

Uğur Gürses

Banking Regulation and Supervision Agency (BDDK) decided late Feb. 3 that 63 percent of the privileged shares that make up the executive board of Bank Asya should be controlled by the Saving Deposit Insurance Fund (TMSF). This decision has been made according to Article 18 of the Banking Law. The justification for the decision was “because the institution has not presented a partnership structure that is transparent and open enough to allow for effective regulation.”

The basis of the decision that 63 percent of the shares in Bank Asya are controlled by the TMSF is this paragraph in the article: “Shareholders with qualified shares shall be required to meet the criteria applicable to founders. Shareholders with qualified shares who do not bear the conditions required for founders any more shall not benefit from the shareholder rights other than dividends. In such cases, other shareholder rights shall be used by the Fund, upon the notification of the Agency.”

In other words, the partners of a bank who have been operating for almost 20 years have all of a sudden “lost their qualifications?” There is no explanation on this part.

Experts point out to certain contradictions. The first is that the BDDK does not clarify which features are lacking in the bank’s partners. But they have made this decision because “information was not submitted.” This is very debatable. The BDDK should be transparent in this matter; it should be informing the public.

Without the bank’s general assembly

Second, it is the BDDK that first gave the licenses to the current partners. Third is that without the bank’s general assembly, even this decision going into effect is questionable.

If we leave aside all these legal problems, the main issue is this: This is openly a political “seizure.” All mechanisms, within or without the legal framework, have been accelerated so that they are working to eliminate the “community,” which in the past was a partner, but later became an opponent of the political power. Apparently, the bank is being targeted in this context. At least, Deputy Prime Minister Ali Babacan who has been announcing that “the law is important” and who was trying to attract investors to the country, should come up with a convincing explanation for this situation.

It is blatantly obvious that there is no reference to the weakness of the bank’s financial situation or any justification about its liquidity. Also, there is no legal basis. If I may say it, with quite “lightweight” reasoning, a maneuver has been made; strange enough to ask the question, “Well then, who gave the permit to this bank when it went public?” It is a move aimed at creating suspicion, to shake confidence among those who deposited their money into the bank or those who have commercial relations with the bank.

Let us not forget that a bank or a company that is made a target because of political reasons is a brick in that sector in a narrow content, but it is a brick in the economy, in a wider content. To withdraw that brick today, which may somehow look “by the book” but at the same time by “bending and forcing” the laws with political motives will damage the entire country. Maybe it will cause irrevocable damages.

Handover procedure of a bank to the fund lasts one year

There is a procedure for the law to be enforced in those banks that have unhealthy financial situations or a deteriorating financial situation. The BDDK, according to the clauses in the Banking Law, demands the correcting measures and remedial measures on those situations when banks need to take measures. In Articles 65 through 69, these are listed. In Article 70, restrictive measures are written, while in Article 71, revoking the operating license and handover conditions to the fund are included.

Even the handover to the fund is only possible after passing through all these phases and after a year has passed. All of this applies when the bank does not take these measures or even though it has partially or totally taken all these measures, several conditions occur, such as the financial structure’s failure to recover and the inability to fulfill obligations.

Published on Hurriyet Daily News, 05 February 2015, Thursday

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• Context, fact and law: demystifying the Bank Asya takeover
• History of politically motivated assault on Bank Asya